Come and invest in the giant of Africa.
On his tireless quest to significantly increase investment into the Democratic Republic of the Congo (DRC), Matata Ponyo, the country's Prime Minister and head of government travelled across the Netherlands meeting with Dutch officials, private sector representatives and key stakeholders in the diaspora, promoting one simple message: invest in the heart of Africa.
After a visit to Berlin last September, Matata Ponyo Mapon, the DRC's Prime Minister, was in the Netherlands from 29th to 31st October promoting his country as a business destination to the Dutch government and private sector stakeholders. He undertook this mission accompanied by a large and distinguished delegation composed of the Ministers for Economy, Trade, Transport, and Finance as well as representatives of the Congolese Business Federation (FEC), the Laity Federation of NGOs with economic vocation of Congo (FOLECO), the Confederation of Small and Medium-sized Enterprises of the Congo (COPEMECO), and the DRC's Ambassador to the Netherlands, Professor Henri Mova Sakanyi.
The DRC-Netherlands Business Forum, held on 29 October in Noordwijk, was the first stop. It was a forum designed to lay the foundations of stronger cooperation between the DRC and the Netherlands and an initiative from the Netherlands-African Business Council (NABC) organised in partnership with the Dutch and Congolese governments.
"You are here because you are interested in the DRC, a waking giant, on course to become the largest in Africa," said Bob Van Der Bijl, NABC's Managing Director (right). "As a Dutchman, from a country of cheese, an agricultural country," Bob Van Der Bijl continued, "I am also delighted that the DRC is investing in agri-industrial parks. A pillar of our future relations. There are other sectors with strong potential, in infrastructure, energy, transport etc."
Matata Ponyo Mapon reminded his Dutch counterpart, Mark Rutte, the Dutch Prime Minister, "of the excellent cooperative relations between our two countries."
"In the field of security," he said, "the Netherlands has been a key player; never afraid to take up the DRC's cause to establish a permanent return to peace, security and stability in the Great Lakes region."
The DRC's armed forces, with the support of the UN's intervention brigade, have ended the atrocities committed by the March 23 Movement (known as M23). "The country is now at peace; it can therefore welcome investors once again."
The aim of Matata Ponyo's visit is precisely to back up and highlight the news of the DRC's economic performance and the many business opportunities it has to offer.
"For many years, the DRC has been resolutely committed to making courageous reforms designed notably to stabilise its macroeconomic framework, promote governance, improve state efficiency, combat corruption and to improve its business climate, essentially to support sustainable growth. These efforts have certainly borne fruit under President Joseph Kabila's leadership. They highlight," the Prime Minister continued, "the positive direction the country has taken, confirmed partly by multilateral institutions such as the IMF, the World Bank and the AfDB, and partly by international ratings agencies, such as Standard & Poor's or Moody's."
A leading reformer
When it comes to improving the business climate, the World Bank published its Doing Business 2015: Going Beyond Efficiency report on 29 October 2014. Between June 2013 and June 2014, out of the 230 reforms classed as improving the business climate, 145 of them focused on reducing the complexity and costs linked to business regulation and 85 others were designed to strengthen legal institutions. The DRC figures among the five African countries classed as the best economic reformers. Predicted growth in 2014 remains 8.7%.
The macroeconomic framework is stable. Inflation remains very low and exchange rates are not volatile; currency reserves are only growing.
The Prime Minister concluded: "I remain convinced that your participation in this Forum will enable us to write a new page in business relations and intensify the economic cooperation between the Democratic Republic of the Congo and the Kingdom of the Netherlands."
Taking the example of Heineken-Bralima, Vlisco and Philips, the Prime Minister said he "keenly invites Dutch investors to explore Congolese markets. [...]. The future of an emerging DRC will also depend on your investments!"
His message did not fail to attract Dutch businessmen and the diaspora.
"For some years now we have seen businesses' growing interest in your country," the Dutch Foreign Affairs Ministry's Director-General for Africa confirmed. "We know that you, Prime Minister, are personally committed to improving the business climate" he said, highlighting the implementation of the one-stop shop that has reduced the time it takes to create a business from 60 days to three.
"Your visit will be very successful," he stated before announcing an economic mission to the DRC. This mission will be led by the Minister for Foreign Trade and Development Cooperation, Lilianne Ploumen. "This reflects our growing interest in your country."
Matata Ponyo continued his tour of the Netherlands through meetings with key stakeholders and local government authorities as well as visits to companies and agri-industrial sites. The DRC Prime Minister's priority was to find secure partners, equipped with real expertise in the agri-industrial sphere, with a view to developing agri-industrial parks within the DRC.
Invest in the DRC's business and investment potential
With growth predicted at 8.7% in 2014, the DRC has confirmed its liftoff and proven that its economic potential is one of the strongest in Africa. The numbers speak for themselves.
The DRC's economic results are trending upwards and the main economic indicators are now rated green. Start with the growth rate. A yearly average GDP growth of 5.4% between 2002 and 2009 and 7.4% between 2010 and 2013. And growth in 2014 is predicted to be 8.7%. This growth is driven by activity in the mining sector, telecoms and agriculture as well as by public consumption and investment. It's a sign of the governments efforts towards sustained and broad-based socio-economic development.
These performances are the result of fiscal and monetary policy. So at the end of 2013, inflation was at a historic level of 1%.
The exchange rate has remained stable on all markets since February 2010. The government has also undertaken specific reforms to develop the financial markets and improve the management of public finances.
One of the flagship measures was to use banking services to pay the salaries for state officers and civil servants, rolled out across the entire country. Similarly, in terms of governance and transparency in natural resource management, the Extractive Industries Transparency Initiative (EITI) labelled the DRC as a "compliant country", while the respective ratings from Moody's and Standard & Poor's further validated the progress the DRC has made towards good economic governance.
"We intend to capitalise on our achievements, consolidating macroeconomic stability and accelerating the structural reforms we need to promote sustainable and inclusive growth," the DRC's Prime Minister, Matata Ponyo Mapon, said during his stay in Amsterdam.
An improving business climate
Business reforms have improved the business climate; they already yield considerable progress. To create a company in the DRC, you had to pay over $3,500, it would take at least 155 days and there were 13 formalities to go through between the various ministries and public administrations.
Since the implementation of a one-stop shop in April 2013, the timeframe has been cut to three days and costs cut to $120 for companies or $40 for individual establishments.
In addition, to fight against legal and judicial insecurity, and strengthen investment protection, the DRC joined the Organisation for the Harmonisation of Business Law in Africa (OHADA). To bolster these provisions, commercial courts are being set up gradually right across the country, and they are currently present in all the country's major cities.
Likewise, the Law on Ratification of the 1958 New York Convention on Arbitral Awards was passed on 26 June 2013. Finally, serious changes have been made to facilitate cross-border trade: implementing Sydonia World software has made it possible to streamline customs procedures and reduce them to 13 days for exports and 25 days for imports.
And to improve even further in this field, the government signed a contract with a private operator to put in place a complete one-stop shop for foreign trade. It will be up and running soon.
The tax burden was made lighter in January 2012 with the imposition of a VAT set at 16%. Tax deadlines have been synchronised and a single tax statement is almost ready. Corporation tax has been reduced from 40% to 35%. These efforts did not go unnoticed in the World Bank's latest Doing Business report: it ranked the DRC among the 10 economies in the world to have enacted the most reforms to facilitate entrepreneurial undertakings.
The DRC, one of the "giants" of Africa, is again attracting businesses and investors. It is one of the largest countries in Africa, both in terms of population and surface area; with an underground rich in various minerals including copper, cobalt, silver, uranium, lead, zinc, cadmium, diamond, gold, tin tungsten, magnesium and even coltan, the DRC has plentiful natural resources.
Having resolutely decided to accelerate the diversification of its economy, the government is committed to promoting the country's other strategic sectors starting with agri-business.
The agricultural potential could reach nearly 80 million hectares of arable land and 4 million hectares of irrigable land, 125 million hectares of tropical forest and there is capacity to produce 700,000 tonnes of fish.
Liberalisation of the energy sector
The liberalisation of the energy sector, through the Law of 17 June 2014, should encourage private investment in the fields of production, distribution and transportation of electricity. The aim is to close the DRC's energy deficit. The government has launched various major projects including the construction of the Inga III power plant, which has a predicted capacity of 4,500 MW at a cost of $2 billion; the construction of Grand Inga, with a capacity of 39,000 MW, at a cost of $60 billion; the reconstruction of hydropower plants and the construction of electrical transmission lines at a cost of $6.4 billion; and the construction of other plants with a capacity of 1,960 MW to serve as a supply source for local industries.
Improving basic infrastructure
Refurbishing and modernising the country's basic infrastructure is one of the priority pillars of the governments action programme, with a focus on transport and agriculture.
These infrastructures should accommodate demographic as well as technological changes. The state is calling for private investors, under the framework of public-private partnerships, and plans to lay the groundwork for modern agriculture, by developing agri-industrial parks, refurbishing transport infrastructure (roads and rail), and the air industry (runways, control towers, technical blocks and terminals, air navigation equipment), creating an airline (Congo Airways), acquiring lighting equipment and dredging the river etc.
The projects are numerous. All that is needed are reliable and committed investors.
THE DRC EN ROUTE
In President Joseph Kabila's view, the government's drastic measures and difficult but necessary reforms have made it possible to unlock rich resources and immediately reinvest them in the country's socio-economic development.
This more rational national resource management has allowed the DRC government to reinvest resources in infrastructure construction, refurbishment and modernisation. Under the DRC's road network reunification framework, all provinces will have a road connection to Kinshasa. Around 6,000km of roads are planned for construction.
A modular terminal is nearing completion on the current site of N'Djili international airport in Kinshasa. Matadi port has been refurbished to boost its capacity. Banana, giving sea access to the country, is expected to see a major deep water port project.
In the meantime, a floating harbour will ease the transition during construction.
Under the framework of the education infrastructure refurbishment and reconstruction project (PRRIS), there are plans to build 1,000 schools. Free primary education has been rolled out across 9 of the 11 provinces. A total of 330 health centres, all government-financed, are to be refurbished and resourced.
The Institut Medical de Kinshasa has been completely refurbished and resourced and has become the National Pilot Institute for the teaching of Health Sciences (INPESS). The Kinshasa provincial general referral hospital and the Ngaliema clinic have been issued with modern equipment. The Kinshasa Hdpital du Cinquantenaire is now operational. The government is now working to establish universal healthcare.
This report was published on behalf of the Prime Ministers office. The writing and editing were conducted independently of the State. For more information please contact SR@icpublications.com
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|Title Annotation:||SPOTLIGHT: Democratic Republic of Congo|
|Comment:||Come and invest in the giant of Africa.(SPOTLIGHT: Democratic Republic of Congo)|
|Date:||Dec 1, 2014|
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